Produced in response to vigorous pressure from a number of major investor groups, the guidelines–described as "interpretive" by the SEC–don't create new regulations and don't necessarily require that companies disclose their carbon footprint or the steps they're taking to reduce emissions. Instead, they're meant to clarify previous less-than-clear SEC requirements to disclose certain risks by organizing them into a few specific areas: domestic and international regulations and legislation, physical damage, and such indirect effects as threats to supply chains or company reputation. (See box.)

The guidelines aim to address the hodge podge of reporting among companies, especially those in similar industries, and create a more consistent standard. They also force companies that might face indirect risks to analyze and disclose those issues. "Investor groups felt there was a diminishing amount of disclosure the more you got away from the epicenter of risks," says Smith. "They took the view this is a global issue and everybody is affected."

Then, there's the avalanche of climate-change information generated for non-governmental organizations, such as the Climate Registry, the Carbon Disclosure Project and the Global Reporting Initiative. The Carbon Disclosure Project, for example, receives annual voluntary submissions from more than 2,400 companies worldwide. In addition, a number of businesses produce separate, often lengthy reports on their sustainability practices, often posted on their Web sites. Yet many companies making extensive disclosures through other avenues haven't been as open in their financial filings, Smith says. "The feeling is, you can't tell me your 60-page report on sustainability doesn't translate into something you can say to the SEC."

Duke Energy in its most recent 10-Ks has discussed the potential effects of everything from pending cap-and-trade legislation and state regulatory requirements to more frequent and severe weather events. "We believe we already consider, and when appropriate, make disclosure related to these issues," says Thomas Williams, Duke's director of external relations.

But the fact is, such companies are in the minority. A recent review of more than 6,000 SEC filings by S&P 500 companies from 1995 to 2008 by the Center for Energy and Environmental Security, Ceres and the Environmental Defense Fund found that 75% of annual reports filed in 2008 made no mention of climate change. Only 5% included a strategy for managing risks. And a review of about 400 companies by McGuireWoods, a Richmond, Va., law firm, reported that just 17% of companies included a discussion of climate change in their 2009 annual reports. "The amount of information provided by companies is spotty and scant," says RiskMetrics' Cogan.

Then there are companies like Textron, a $14.2 billion conglomerate based in Providence, R.I, that has an ambitious program to reduce carbon emissions, waste disposal and energy consumption by 20% over the next five years. But Douglas Wilburne, vice president of investor relations at Textron, says climate change-related risks simply aren't what investors in his company are concerned about. "Investors' questions are now all around trying to determine future cash flow," Wilburne says.

"Climate-change issues are a relatively small percentage of our costs, " he says, " In my 10 years of doing investor relations, the issue of climate-change risk has never once come up from investors."

Still, it's the companies facing indirect threats that are likely to tackle the biggest changes to their reporting. That includes companies that could experience business interruption and property loss if, for example, severe storms were to shut down an important plant, or that have a supply chain vulnerable, say, to drought. In fact, there are a myriad of indirect risks that many, if not most companies, might face. "If your public perception of your brand comes from being efficient and green, and you have to disclose something about your operations running counter to that, you risk a hit to your reputation," says Cravath Swaine's Smith.

Perhaps the grayest area for now relates to uncertainty over the passage of climate-change legislation. It's a tricky question. On the one hand, "it's an area of wiggle room," says Cogan, "If you don't believe any actions will be taken by Congress during the coming year, you can say there's no reason to disclose anything about that in your filings." On the other hand, the guidance includes a clear process for how to evaluate whether pending legislation is likely to be enacted, thereby putting the burden on the company to prove why the topic shouldn't be discussed. "Unless they determine something is not reasonably likely to be enacted, they have to discuss whether it will pose a material risk," says Cogan. That means including information such as the potential cost of reducing emissions in order to comply with new regulatory limits.

At the same time, the guidelines call for companies to spell out potential benefits as well as risks. And that gives businesses the chance to call attention to actions that could provide effective public relations. "For some companies, this is an opportunity to tell more of their story," says Cogan. That's particularly true for companies, such as consumer product manufacturers, that aren't in industries usually associated with climate-change issues.

For many companies, the immediate issue is reorganizing their reporting processes to respond to the guidelines. For those that already produce extensive reporting, it's not an issue. At Duke, for example, "the people who do our SEC documents are regularly in communication with the folks who are on our environmental teams," says Williams. But the story is different for most businesses. Smith says he's counseled "a number" of companies who are considering how to reorganize just who is responsible for producing and vetting sustainability information, both for the SEC and for other organizations.

"Companies are taking a hard look at the chain of command and lines of responsibility for any disclosure they make–and if they aren't, they should," Smith says. In many cases, he feels, it's the general counsel and CFO who will assume that control. At the very least, observers say, companies will make sure risk officers work more closely with environmental compliance officers, and that pertinent information is evaluated routinely by C-level executives.

Perhaps most important, the role of the board is likely to change, governance experts say. Boards will need to take such steps as forming dedicated environmental committees to address the issue. Jane Sellers, a partner with McGuireWoods, says the relationship between risk officers and the board may also evolve. "We'll see risk officers report periodically and directly to board committees."

Ironically, one result, at least initially, could be a decrease in the amount of total reporting, according to Smith. That's because finance and legal executives are likely to start taking a more serious look at all the voluntary, non-SEC sustainability reporting produced by their companies. "Once the general counsel or CFO start analyzing everything the company puts out using more rigorous standards, they may choose to pull back on what they allow people to say," he says.

Criticism of the SEC guidelines is coming from several areas. Keith Mabee, vice chairman of Dix & Eaton, a Cleveland, Ohio, communications firm that represents companies from a wide swath of industries, says, "Most people are saying this is a noble intent but see this as poorly designed social policy masked as regulatory guidance."

Rep. Spencer Bachus (R-Ala.), the ranking member of the House Financial Services Committee described the move as "ill-advised" and "reaching beyond the SEC's expertise." And, after the 3-2 vote by the SEC, dissenting Commissioner Kathleen Casey said the issuance of the guidelines, "at a time when the state of the science, law and policy relating to climate change appears to be increasingly in flux, makes little sense."

Despite these criticisms, however, the issue clearly is one of urgent concern to a great many investors. In early March, leading U.S. investors announced they had filed a record 95 climate-change related shareholder resolutions with 82 U.S. and Canadian companies, a 40% increase from the year before, according to Ceres. Many of the resolutions target issues that relate directly to the SEC's guidance. Case in point: resolutions filed with ExxonMobil and ConocoPhilips asking for reporting on their controversial oil sands extraction activities.

The SEC is not alone in its stepped-up scrutiny of climate-change issues. The Environmental Protection Agency recently created new reporting rules for large emitters of greenhouse gases. The National Association of Insurance Commissioners is creating a standard for mandatory disclosure of the financial risks of climate change by insurance companies. And, of course, there's pending legislation in Congress to cap greenhouse gas emissions and expected EPA regulations regarding automobiles and other sectors.

No matter what your position is, one thing's for sure. The days of vague–or non-existent–disclosure regarding climate-change risks are over. Now, it's up to companies to react.